Tesla reported their Q3 2019 financial results today, and the numbers were a mixed bag.
Investors had been expecting revenue of around $6.517 billion and a loss of $0.15 per share.
Tesla however only managed $6,3 billion in revenue, down year on year for the first time, but investors do not appear to be disappointed, with Tesla’s shares up 10% after hours.
The reason is likely the healthy $1.91 per share Telsa managed to generate, defying expectations wildly.
Tesla reports that the revenue shortfall was due to a massive increased in leased vehicles (up 3 times) and many more cheaper standard range Model 3 cars being sold.
“Compared to Q3 of 2018, the percentage of leased vehicles has tripled and alone has impacted revenue by the majority of the YoY decrease. Model 3 mix has increased while we have taken actions leading to the reduction of the ASP of our products. These ASP reductions are particularly impacted by the launch of the Standard Range trims of Model 3 and pricing actions earlier in the year.”
Tesla says their profit per vehicle has actually increased, despite selling more cheaper cars, and that they saw the company as mostly profitable and self-funding going forward. Tesla also expected their vehicles to be cost-competitive with ICE cars in China even before fuel savings, and expects China to become their biggest market, especially now that Gigafactory 3, which cost 65% less to build, is now complete and nearly ready to ship cars.
I am sure doomsayers will soon find ways to pain today’s numbers into a more gloomy picture, but with record deliveries of 97,000 Tesla cars last quarter and a massive profit, I think Tesla investors have some reason to celebrate.